Abhishekh Kumar JL13FS04
Paritosh kumar Singh JL13FS35
Romanshu Varshney JL13FS64
Rohit Kishore JL13FS47
Rajneesh Kumar JL13FS44
Prakhar Pandey JL13FS39
TAIICHI OHNO AND TOYOTA
Ohno was born in 1912 in Manachuria, China. After
graduating from the Nagoya Technical High school, he
joined Toyoda Automatic Loom Works in 1932 and
moved on to automotive business in 1943 as an
assembly manager. By 1975, Ohno was made a vise
president. He retired the same year, bur remained
associated with Toyota till 1982. Ohno died in 1990 at
• Toyota history goes back to 1897, when Sakichi oyoda diversified into
the textile machinery business from the traditional family business of
carpentry. Skichi’s son Kiichiro In early 1930s convinced his father to
launch a automobile business. The first prototype was developed in
• In 1936 sakichi sold the patent rights of his automatic loom to a
company in England. Kiichiro was made the managing director of the
new venture. The new company was named Toyota.
• In 1950 after a major strike by the labor unions, kichiiro was forced to
step down and his cousin Eiji Toyoda, who was also a engineer from
Tokyo university was made managing director.
• Toyota first export to the US was the Toyota crown and then the
• Toyota brought TPS to the US in 1980s, when it set up a joint venture
with GM called New United Motor Manufacturing Inc., (NUMMI).
• In 1983, the company’s name was changed to Toyota Motor
Corporation. In 1988, Toyota opened its own plant in
• Tatsuro Toyoda then took over as the company’s president in
• In 1999, Okuda replaced chairman Shoichiro Toyoda and Fujio
ho became the president of the company. In the same year
, Toyota listed its shares on both the the New York and London
stock exchanges. By the early 2000s , Toyota had become one of
the top manufacturers of cars in the world and was poised to
become the biggest automobile company.
• Toyota Production System (TPS)
• The TPS involved a flexible batch process, with multipurpose
capital equipment and cross trained workers supplied by JIT
inventory. It aimed at eliminating wastage and lowering capital
expenses to increase productivity through a process of
continuous improvement or kaigen. It focused on
empowerment of workers and on developing strong relations
• This whole case is about Toyota’s efficient production
how Toyota gains comparative advantage over other car
• TPS consisted of two aspects- the “Hard” or the
technical part and the “Soft” or people related part.
• The hard aspect focused on the manufacturing systems
like JIT and Kaban and soft part related to respect for
humans, which included workers and suppliers.
• TPS tried to increase the efficiency of production by
eliminating waste and lowering costs.
JUST IN TIME
• JIT was the foundation of TPS. Its aim was to eliminate
waste of all kinds by producing or supplying materials
only when they were needed and not earlier.
• The principle behind JIT was to produce “only
necessary products, at the necessary time and in
necessary quantity”, to keep the stock at minimum.
• Adopting JIT allowed Toyota to do away with inventory
and stores, thereby cutting out the corresponding costs.
• JIT was based on reverse reasoning, and the working of
the production line started at the point of customer
• Kanban was the cornerstone of JIT and helped Toyota
achieve a high level of outsourcing.
• In this system process needing components wrote the
details about the kind of units needed and the quantity
on a card called the KANBAN. A worker then took this
card to the preceding process and withdrew the
• Kanban had evolved into sophisticated inventory
management tool that ensured production in the
required quantities at the right time in all
manufacturing processes within a factory.
• Kaizen meant continuous improvement and was another
element of TPS. Kaizen required all employees to participate
in eliminating all activities that were classified as waste from
the production system.
• Kaizen involved a great of observations of workers and their
• The focus of Kaizen was not just to identify a problem and
develop a solution, but to understand the problem and all its
• Considering the persuasive nature of Kaizen activities, the
support and commitment of the management was an
important prerequisite for their successful implementation.
• An important element in Kaizen was Poka-yoke
involved the creation of processes that moved smoothly
from step to step, without giving room for errors to
THE HUMAN ELEMENT AND
The human element played an important role in the TPS.
Analysts said that the organizations and structure of
the human resource function , in addition to the
corporate culture, played a very important role in
Toyota's success. The main considerations in TPS were :
• Elimination of wasteful movement by the workers
• Consideration for workers safety; and
• Self display of workers capabilities by entrusting them
with greater responsibility and authority
The TPS emphasized flexibility and team work. Most of
the workers were cross trained and could be shifted
Different production lines.
Jidoka was manifestation of Toyota’s commitment
towards empowerment. This philosophy empowered
workers to stop the equipment or operations in a line
whenever an abnormal or defective condition arose in
the line. This displayed the trust that Toyota placed in
the capability of its workers and was also meant to
promote worker participation. The Jidoka system
helped direct attention to the problem as soon as it
occurred, thus preventing further complications.
This helped Toyota achieve a high level of quality.
• John Krafcik a researcher first coined the term “Lean
Manufacturing” in the late 1980.
• The concept was based on the Toyota’s Production
System, which manufactured better quality products with a
lower defect rate and at a great speed than its competitors.
• Lean manufacturing is ‘lean’ because it uses less of
everything- half the manufacturing space, half the
investment in tools, half the engineering hours, and half the
time to produce goods that have fewer defects.
• It combines teams of multi skilled workers at all levels of the
organization and uses highly flexible and increasingly
automated machines to produce volumes of product of
BENEFITS AND CHALLENGES
Analysts said that the TPS conferred a great amount of
flexibility and productivity enhancing capabilities on
toyota. By the early 2000s, toyota had the capability to
manufacture a car, from raw material to final
assembly, in five days. This gave the company a
considerable advantage over competitors. Concepts like
the kaizen and jidoka ensured that high levels of quality
were maintained, making Toyota one of the best car
companies in the world. In quality survey conducted in
2000, toyota captured the top position in nine out of
thirteen vehicle segment and won the Top three plant
•In the fiscal year 2004 the company’s revenue and operating
income were US$ 163 billion and US$ 15 billion.
•It was double the combined net earnings of automobiles majors
like the GM, Ford and Honda.
• The foundation of toyota performance was because of its much
analyzed and emukated manufacturing system.